Status Quo Bias and the Number of Alternatives: An Empirical Illustration from the Mutual Fund Industry

  title={Status Quo Bias and the Number of Alternatives: An Empirical Illustration from the Mutual Fund Industry},
  author={Alexander Kempf and Stefan Ruenzi},
  journal={Journal of Behavioral Finance},
  pages={204 - 213}
We examine the extent of the status quo bias (SQB) in a real-world repeated decision situation. Individuals who are subject to the SQB tend to choose an alternative that they chose previously (i.e., their status quo), even if it is no longer the optimal choice. We examine the U.S. equity mutual fund market and find strong evidence of the SQB. Furthermore, the SQB is more severe in segments that have more funds to choose from. Thus, we deliver the first empirical confirmation of the experimental… 
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